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Making Medicaid Work: Dentist For The Poor

From: Forbes.com
Contributed By: Howard Husock

America’s “independent sector”—its civil society—is the best-funded and most robust in the world. It consistently develops new and effective approaches to some of the nation’s most serious social problems. Since 2001, the Manhattan Institute has sought to identify and recognize some of the most promising social entrepreneurs and the new non-profits they’ve founded, based on their own original ideas. The more than 50 winners of the Richard Cornuelle award, named for the writer who coined the term independent sector, have addressed challenges as diverse as teaching English to new immigrants, building facilities for charter schools, helping older Americans “age in place,” developing science and engineering curricula for high schools, and helping African-American college students continue through to graduation. Most are supported entirely by private philanthropy. In this column, part of a series of six, I’ll profile this year’s winners of the Cornuelle award—and of the $100,000 William E. Simon Prize for lifetime achievement in social entrepreneurship, named for the late Secretary of the Treasury and author of A Time for Truth. Past winners have included Sal Khan, founder of Khan Academy and Brian Lamb, founder of CSPAN. This week I feature the Anniston, Alabama-based Sarrell Dental Centers, where they’ve figured out a way to bring dental care for the first time to thousands of poor children.

When Jeffrey Parker first arrived at what was then the Calhoun County Dental Center in Anniston, Alabama, he had no expectation that either his own life—or the dental clinic—were about to be transformed dramatically. At age 40, he had already had a successful corporate career (as an executive at Con Agra at age 26, and the leadership of two of Sara Lee’s food divisions, at age 31), and was content to be semi-retired, teaching management at the Jacksonville State (Alabama) school of business. On occasion, at the request of the school, he provided pro-bono consulting services to start-ups and non-profits. One of those was a volunteer-based dental health clinic seeing only a few hundred patients a year; it hardly seemed like the vehicle to rekindle Parker’s career as a corporate turnaround executive.

Today, some eleven years later, though, the Sarrell Dental Clinic, led by Jeffrey Parker, could not be more different—nor more effective. Although named for the founder of the small volunteer operation, it has been utterly transformed. Its 17 locations now provide some 175,000 visits for poor Alabama children and families a year. Although still a nonprofit, it brings in some $15 million annually in revenue—enough to support 49 salaried dentists and 43 dental hygienists. As a result, says Parker, “are eliminating cavities among some of the poorest children in the poorest counties in one of America’s poorest states.”

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That success has come through a most unlikely business model. Although its roots are in traditional philanthropy—the Northeast Alabama Community Foundation seeded the project with a $300,000 grant—Sarrell has forged a successful enterprise without the ongoing use of donations and volunteers. Instead, it’s succeeded by doing something that most dentists won’t do: accepting the limited patient payments provided by the Medicaid program of government health insurance for the poor. Notwithstanding the nature of the source of its revenue, it is Jeffrey Parker’s social entrepreneurship—his skill as the leader of a free-standing non-profit—that are the key to Sarrell’s success.

The vast majority of the 46.9 million Medicaid-eligible children across America—in other words, the nation’s poorest kids—never see a dentist. It’s a situation that poses the risk that children will develop serious medical conditions because of untreated oral health; indeed, the annals of Medicaid horror stories include that of Deamonte Driver, a 12-year-old Maryland boy who, in 2007, died when an untreated tooth infection led to a bacterial infection that spread to his brain. That’s because only a small minority of dentists—an estimated 32 percent—accept Medicaid patients, because, it’s typically said, the government-set reimbursement rates fall below those typical for private dental practices.

The response by organized groups such as the American Dental Association has been to push for increased government spending—through higher Medicaid rates for dental treatments. Jeff Parker’s model at Sarrell has taken the opposite tack. It’s based on creating a model so efficient that Medicaid payments will not only allow what is now a chain of urban and rural dental clinics to break even—but to show a surplus that can be used to buy the most sophisticated dental equipment, provide summer sports camps for some of the kids whose teeth are being cared for, and even support $1.5 million in charity dental care—for adults with severe problems referred by social service agencies, and kids whose particular type of dental coverage puts a ceiling on how much the government will pay.

The elements of Jeffrey Parker’s business model are surprisingly uncomplicated—but nonetheless powerful. He begins with the idea that dentists should be paid “straight salary”; it’s a sharp contrast to most Medicaid/Medicare-based medical practices, which seek to increase revenue by ordering more tests and procedures. Parker instead fixes salaries—but at a high level. (A $150,000 starting salary is substantial in Alabama). Crucially, Sarrell does not wait for poor children and parents—many of whom have never seen a dentist—to seek it out. Instead, they recruit in ways that its non-profit status allows them to do: at Head Start centers (where they also reach out to mothers who are pregnant), at community centers, and at public schools, where Sarrell conducts basic dental screenings. To make sure that those who go on to make appointments keep them, Sarrell staffs a high-volume call center, including Spanish speakers, whose Anniston office keeps a key chart on its wall. It tracks the percentage of time in which Sarrell’s dental chairs (there are six in the Anniston office) are filled by patients. On many days, that key chair figure reaches 100 percent—as a result of which Sarrell, because not all of its care is reimbursed, is actually reducing the government payment it receives per Medicaid claim. (It’s fallen from $328 to $111 per patient visit). Better oral health means less expensive care.

Dentists don’t receive bonuses for bringing in more Medicaid revenue—but, for ensuring that Sarrell runs at or near capacity, call center staff do have financial incentives, based on “chair rate.” They also have prospects for advancement: Sarrell dentist Yesylle White began in the claims department and call center. Thanks to the surplus it runs, the organization was able to pay her dental school tuition at the University of Alabama, Birmingham. Important, as well, is the fact that Sarrell is a multi-specialty practice: a simple cleaning and a complex root canal treatment can all take place under the same roof.

“We’ve seen patient growth,” says Parker, “for 34 consecutive quarters.” Its focus on pediatric dentistry means that Sarrell branches are serving half the kids seeing a dentist in the state of Alabama. Such is what happens to health care when a successful corporate CEO—who very much talks like one—becomes a social entrepreneur.

Not surprisingly, Alabama’s private practice dentists were less than thrilled about the competition posed by Sarrell—and a battle was joined on both legal and legislative fronts. A key issue was the fact that Parker himself is not a dentist—a fact that could be interpreted to mean that his role was illegal. Indeed, Parker would not be permitted in some 46 states to operate as the business manager of a dental practice; indeed, in New York State, he might be considered to be committing a felony. In Alabama, however, a 2013 change in Alabama’s Dental Practice Act gave official blessing to Jeffrey Parker’s second career. It’s a career that is now leading Sarrell to expand to other states. It’s already operating in Kentucky, where it operates under the name Community Care of Kentucky, and in Texas, where it’s taken over a failing Dallas nonprofit and plans to expand under the name Community Dental Care. Its expansion is getting a boost from an affiliation with the Massachusetts-based oral health advocacy non-profit DentaQuest, which is providing growth capital.

It’s an unlikely story. A high-powered but early-retired corporate executive drawn to rural Alabama. A non-profit that relies on government funding—which is happy because it’s receiving less money per patient served and does not believe government spending should increase. Jeff Parker didn’t invent Medicaid—and might not have ever done so. But he’s certainly re-invented an important part of it—in the process demonstrating the critical importance of the decentralized management which the U.S. system of not-for-profit organizations makes possible, saving taxpayer dollars and, more important, helping poor children.

2015 winners, Manhattan Institute social entrepreneurship awards:

William E. Simon Prize: Norman Atkins, Relay Graduate School of Education: A revolutionary education school focused on effective classroom teaching.

Richard Cornuelle Award Winners:

Bard Prison Initiative, Ellenville, NY: College degrees behind bars

Edwins Leadership and Restaurant Initiative, Cleveland, Ohio: Culinary arts training and job placement for ex-offenders

Found in Translation, Cambridge, MA: Immigrants using their language skills as medical translators of major hospitals

Sarrell Dental Centers for Public Health, Anniston, Alabama: First-time dental care for thousands of poor Alabama children

Team Rubicon, Los Angeles, CA: Veterans applying military skills to disaster relief

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